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Burgess said the tax exemption will encourage people to buy locally, instead of traveling to New Hampshire, a sales tax-free state. She will present the bill at a public hearing before the Taxation Committee next Tuesday, April 14, at 1 p.m. She said the bill, LD 1148, has bipartisan support, with more than 40 co-sponsors.

"Our local retail community is dying," Burgess said. "I call this bill the first stimulus bill that will actually help the
citizens. It's the first stimulus bill to stimulate Maine
economy."

The proposed tax exemption will not apply to gasoline, cars, boats, or tobacco products, she said, and also excludes meals and items over $2,500.

"We are talking about a sweater, a purse," Burgess said. "Lets keep money at home and give people a reason to go shopping."

Burgess said this is not the first time such a bill has been presented, but it has not gained momentum and has never been supported.

"It has been an uphill battle in Maine," she said. "It needs the support from the people."

Rep. David Webster, D-Freeport, said he is not a supporter. He said as a member of the Appropriations
Committee, he has to ask how the state can account for the revenue losses a tax holiday would generate.

"This
bill will create an additional hole in our budget, which is already
struggling," Webster said.
"I would love to find ways to stimulate the economy, and none of us
like taxes, but we have to realize, that is our responsibility."

Webster said he is a supporter of the effort to make it easier for
businesses to succeed, but said he questions whether the holiday would
actually help businesses, or just shift purchases from one weekend to another.

"We have to be responsible for paying our bills," he said.

Curtis Picard, executive director of the Maine Merchant's Association, said all of New Hampshire's neighbors – except Maine – have tax holidays, and it makes sense to implement one here, too.

He said the proposed Columbus Day tax holiday weekend will give shoppers three days to spend their money locally, and will attract Canadians who have a holiday around that time.

"I have talked to colleagues in other states, and have found that nothing drives people like saving during a tax holiday," he said.

Burgess said the trade-off of losing state tax money is "worth it."

She said the money that is lost to the state will be replace by sales tax revenue from lodging and dining. She said there will be more people traveling, and tax revenue will be generated that way.

While Picard said he has not seen any fiscal notes yet, he estimated the holiday could cost the state $3 million to $4 million in lost taxes.

"In a budget of $3.1 billion, that is less than 1/1000th of the state budget," he said. "It is an opportunity to stimulate, and it is important."

Burgess said Maine residents need economic encouragement from the state.

"This is not an overnight fix, it's about going shopping," she said. "It's about giving Maine residents a break, it's a simple stimulus for the people."

Amy Anderson can be reached at 781-3661 ext. 110 or aanderson@theforecaster.net.